Mexico’s Constitutional Changes: Energy Outlook and Implications

On October 17, the Mexican Senate approved a constitutional reform aimed at strengthening state-owned enterprises Mexican Petroleum (Pemex) and the Federal Electricity Commission (CFE). This reform is part of the 20 legislative amendments sent by former President Andrés Manuel López Obrador earlier this year. The constitutional reform regarding strategic areas and state-owned companies, among other issues, seeks to reverse the 2013 constitutional amendments that opened the energy sector to private investment.

Under the new bill, Pemex and CFE will be classified as "state-owned enterprises," placing them under government control. The reform grants the CFE the authority to generate 54% of national electricity without being labeled as a monopoly and mandates that the National Energy Control Center (CENACE) prioritize state-produced energy.

Moreover, the reform establishes that access to lithium extraction will be limited to the government, recognizing it as a strategic sector of the State. The reform aims to lower electricity and internet service costs while reinforcing the nation’s energy sovereignty. The implications of this shift are raising questions about market competitiveness and the balance between public ownership and private enterprise in Mexico's energy landscape.